Allan Wilkinson, head of agriculture at HSBC, has declared 2013 as the year the agricultural sector needs to concentrate on the basics in order to preserve margins.
Launching HSBC's 37th annual Forward Planning publication for the industry, Mr Wilkinson warned farm incomes are expected to plateau next year, which means farmers must place extra emphasis on costs of production and enterprise margins.
Mr Wilkinson said: "There are no secrets to being the best – the attributes have been well documented and include a strong desire to succeed, a clear strategy, maximising the deployment of all business resources, regular benchmarking and business planning. Last but not least, a thorough understanding of your main customers is essential."
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He added: "Recent weather events have highlighted the need for planning. Price volatility on both sides of the budget mean that the range in the final margin can be wider than ever, and the margin for timing differences being shorter than ever. After recent high levels of farm incomes, this has to be the year to concentrate on the basics in order to preserve margins."
Turning to the red meat sector he said: "UK beef production is unlikely to recover from current low levels in 2013, and the weak economy both in the UK and abroad could dampen prices. Although home sheep consumption continues to fall, exports are rising and we expect to see growth in sheep flocks next year. However, 2012 may prove to have been the peak in the current profitability cycle."
The Cumberland and Dumfriesshire Farmers Mart had a smaller show of mainly stronger store cattle at their fortnightly sale in Dumfries yesterday.
Fifty-six bullocks sold to a top of 210.5p per kg and averaged 177.5p, while 31 heifers peaked at 198.8p and levelled at 170.5p.
John Swan Ltd sold 37 prime bullocks in St Boswells yesterday to a top of 235p and an average of 211.1p (+4.7p on the week), while 33 prime heifers peaked at 241p and levelled at 209.3p (-3.1p).
Four young bulls sold to 206p and averaged 185p.
In the rough ring, 67 beef-type OTM cattle averaged 137.6p (+1.4p).
The firm also sold 2509 prime lambs to a top of £89 per head and 180p per kg to average 160.2p (+2.1p), while the 556 cast sheep forward were topped by both rams and ewes at £107 and levelled at £48.19 overall.
Messrs Craig Wilson Ltd had 1642 prime lambs forward at their weekly sale at Ayr yesterday when export lambs were dearer on the week, while those weighing less than 37kg and heavier lambs met a similar trade. Top prices on the day were £87 and 188.8p with the overall average levelling at 153.1p (+3.1p).
There were also 624 cast sheep forward with Continental ewes keenly bid for, while Blackfaces and Mules met a similar trade to last week. Ewes sold to £124 for a pen of Texels and £56 for Blackfaces.